Posted
by
timothy
on Thursday March 25, 2010 @04:00PM
from the in-these-troubled-economic-times dept.

halfEvilTech writes "India's Prime Minister, Manmohan Singh, told the Indian press that Dell chairman Michael Dell assured him that Dell was moving $25 billion in factories from China to India. Original motives were cited for environmental concerns. But later details come up as to Dell wanting a 'safer environment conductive to enterprise.'"

This is not true. Few of the chips are made in China. Circuit boards are likely to be made in Taiwan. Individual components on the boards besides chips are made in lots of countries. Dell used to assemble many of their machines in Austin, TX until recently.

As with a car, most complex machines do have parts from all over the world. We are only stuck with no other option than China if we continue the current trend of giving all manufacturing to China. This can be reversed if you look at where the i

I could just as easily say that the six counties of Northern Ireland are controlled by Monarchist bandits and that the national capital of Northern Ireland is Dublin.

Obviously we're talking about who has the monopoly of violence in the case of the ROC v. the PRC. For all intents and purposes they're separate countries, but if you want to play that game the Communists successfully overthrew the Nationalists quite a long time ago. It was a net negative for the people of China, but it is an accurate representation of the facts.

Well, that's almost Flamebait..like saying 'Canada is part of the USA' IMHO

Without rehashing all the history, the modern reality is that the (current) Taiwanese population would not consider themselves part of the Chinese Socio-Political system any more than the Tibetans would.

Canada had to do this in response to the US. The US required everyone entering to have a passport. If Canada didn't do the same they'd be stuck with a bunch Americans who came over the border with their drivers licenses and couldn't easily pass back into the US for lack of the required passport.

Yeah, it was a huge deal up here in Canada, eh? People on teevee, crying and screaming into the camera WONT SOMEBODY THINK OF THE AMERICANS? And then they showed a bunch of confused Americans milling aboot in front of Immigration, stuck with nothing to do like a bunch of hosers.

This is not true. Few of the chips are made in China. Circuit boards are likely to be made in Taiwan.

You may not realize this, but Taiwan is part of China.

You may not realize this, but Taiwan is NOT part of China. Taiwan follows the old government that existed prior to the "cultural revolution" that spawned the current Chinese Communist Party government.

Taiwan follows the old government that existed prior to the "cultural revolution" that spawned the current Chinese Communist Party government.

When you say cultural revolution [wikipedia.org] in the context of China, you are actually talking about a fairly specific event that occurred long after the civil war that resulted in the schism between Taiwan and mainland China. The Cultural Revolution occurred in the late 60s whereas the KMT's retreat to Taiwan occurred around 1950. The communist party in China preceded the cultural revolution.

The truth of that statement depends very much on whom you ask [wikipedia.org]. As things stand Taiwan is de-facto an independent country. The People's Republic of China (mainland) maintain that Taiwan is a part of China, whereas the Republic of China (Taiwan) maintains that they are actually the legitimate government of China and that the PROC has no sovereign authority. However Taiwan has had to take great care to not antagonize the PROC due to the threat of invasion.

Apparently you are uninformed about the situation. It's extremely complicated.

Taiwan is it's own country by all measures except that China still thinks it has a right to it.

Which is precisely what makes it complicated. When one of the most powerful countries on earth thinks they own your land, life gets interesting and not in the good way.

No one outside China thinks Taiwan is part of China.

Taiwan does not have a seat in the UN. Almost no countries on earth have recognized Taiwan as an independent country including the US. Despite Taiwan being de-facto independent, there are many even within Taiwan who think the two should reunite.

Try going there like I have. I've been to China and spoken with both mainlanders and Taiwanese about this issue. It's not simple and anyone familiar with the situation will think you an idiot for calling it simple. A shooting war in the Taiwan straight is a small but very real possibility and would be a global problem. Peaceful reunification is also a possibility. Continuation of the status-quo is likely for the immediate future but no one knows long term.

Nowhere? As someone who has sourced items from numerous countries I can say with authority that you are quite mistaken. China is an excellent (if difficult) place to source things cheaply but it is hardly the only place to make things. There are places with cheaper labor (Vietnam), better engineering (Japan/Germany), comparable/better logistics (Singapore), and the list goes on. China is an important option but not even close to the only option.

People had been predicting all of this for some time. Where can you manufacture cheaper and with less bureaucratic impediments than China? Why, India. Just wait, in ten years, Chinese firms will be outsourcing there.

The old adage Live by the sword, die by the sword seems to apply here.

India is a democracy with a much better record of treating its citizens as free human beings. It also doesn't seem to have the taste for global imperialism that China does. In China, you can disappear for protesting on the street. In China, you put in an application if you'd like to move to another city. In China, the internet is filtered. India should be a great friend of the United States. Americans have a lot in common with them, and in that part of the world, America could use more friends.

The big difference is that in India, it is a problem of the society as a whole, and the government 1) recognizes it as a problem, and 2) tries to combat it. In China, political oppression is an official government policy.

LOL, lower castes? In which century are you in? Of course I am not claiming everyone in India receives the same opportunities and rights. The rich can always maneuver themselves out of courts/police, keep themselves safe from murderers, have their children well educated, get their children and themselves jobs. But it happens in every country, not just India.

those of the lower castes in India would disagree with you, where many are beaten, murdered, systematically denied legal representation, denied justice by government, given jobs in inhumane working conditions, denied educational opportunity.....

Give it time. India has been a democracy for 60 (or 63) years.

63 years into the life of the US (1839) the US also had a lower caste - slaves. Not in all of the US, but the 13th amendment [wikipedia.org] wasn't adopted until 1865 - 89 years into its life. And I'm pretty sure we can f

You know, Dell trades in countries besides the US. No matter where they manufacture the damn things they're probably going to be shipping them abroad to a large proportion of their customers anyway.

I suspect it's only the base systems that are manufactured over there anyway, final configuration still takes place at the local level, I believe. At least I can't see Dell building a system to my spec in India or China and then shipping it over to me in the UK.

Same thing with my Macbook Pro and my wife's Macbook. According to the shipping labels & package tracking, they came directly from China (both from Guangzhou, if I recall correctly), customizations & all. Mine even took a while, as it was held up in customs in Memphis.

I know they would not do that citing cost and other crap. But I certainly would support any company moving production base from communist country to a democratic country. I know there are people here criticizing US, India and other democratic countries about certain draconian laws but these countries are much better than China.

never happen. china has an infinite supply of workers ready to grind themselves into the ground to put $ on the pockets of execs back in the US. that's just too sweet a deal for US corporations to pass up.

google and friends are pulling out for no other reason than it's costing them more to do business there than they are saving. don't kid yourself into thinking that they took some sort of moral high ground.

Yes, but China has shown that it is quite willing to make a deal and break it, stealing whatever they can from companies that move there and giving it to their local competitors. That changes the dynamics a bit.

>Wonder how many more US companies are going to pull out of China. First google, then godaddy, now Dell. What happens when all that China has left, is China?

My company did. We abandoned a brand-new billion dollar semiconductor fabrication facility. Officially it was because we didn't have enough work to fill it along with our several other (non-Chinese) fabs. Rumor says it was at least partly because we were tired of competing with ourselves and our fourth-shift output. However, it certainly wasn't anything to do with fear of nationalization or the unpleasantness surrounding that Australian Rio Tinto executive who was arrested and is currently being tried in China [speroforum.com] for (again, rumor has it) not bribing enough people, although I think that should be at least considered. Since the Rio Tinto trial was front-page Wall Street Journal news yesterday, I'm guessing that today a lot of people who make outsourcing decisions are thinking about it.

India safer? In some ways I suppose but it depends on what you are talking about. The Indian government is less draconian and less likely to try to compete with you. Expropriation [wikipedia.org] is probably less of a concern in India. The rupee has somewhat better convertibility [wikipedia.org] than the yuan and currency flows are less stringently controlled. Plus there is a much larger contingent of English speakers than in China. India's legal system is slightly less hostile to foreigners than China's though both are to be avoided if possible. Freedom of speech is obviously better in India though China doesn't have quite the death grip on speech everyone here seems to think they do.

On the other hand, India's infrastructure is badly trailing that of China, there is less foreign capital to improve things, corruption is a huge issue in India, business regulations are as bad if not worse than China, and transport costs are somewhat worse. Despite the number of engineers, India has less experience with certain types of manufacturing. India is a democracy (which is good) but that doesn't always make doing business there easier - in fact it often makes it harder due to populist policies.

There has been something of a "gotta be in China" attitude but China isn't always the best place to make things. There are places with cheaper labor (Vietnam for instance) and places with better logistics (Singapore) and places with expertise silos (Japan) that might make better choices. Plus betting everything on China is risky by itself. Doing business in China is hard, risky, requires constant oversight, and a long term perspective. Anyone thinking they can just produce stuff cheaply in China with little difficulty is going to lose a lot of money very quickly.

I've done global sourcing in both countries - it's difficult no matter which way you go. I've personally been in a factory in Chengdu where parts for Dell computers were being assembled. Moving production from China to India might be a good idea from a diversification standpoint (bad idea to do everything in China) but it's only marginally safer in my opinion depending on exactly what one means by safer.

It is my pleasure to be helping you today. I understand you are trying to move your factories from China to India. Just a moment and I will bring up your account. Ok I will look up moving your factories from China to India in our knowledge-base. Have you tried plugging in your factories?

The US has the second highest corporate tax rates in the world. Some States taxes push their jurisdiction to #1 in the world for highest corporate tax places. The US regulatory regime is among the most onerous for corporations and the one on its citizens keeps wages artificially high (60-70% of wages are passed through in taxation).

We don't need China. It's just nice to have cheap stuff, and they make stuff cheap. If no one was buying, they couldn't sell. Its kind of like economic mutally-assured destruction. Despite what the Reaganites may want us to believe, demand still has just as much power as supply.

Yes, they can sell to themselves, which is a closed population, which has demographic policies which ensure that they're going to have more old people than anything else in the mid-term, and those old people aren't really going to be productive. The only way capitalism works is if it can keep growing, which means that they have to start expanding into new markets, if possible -- otherwise, the system chokes on itself. It doesn't work closed in, just the same as Communism -- it wouldn't really work in just

Do you have any understanding of the population of China? I think they will sell those good just fine without the USA, the EU or Africa for that matter.

No they wont. The high end products they produce cheaply cant be purchased by their own people because their own people don't have the wealth to pay for a high end good such as an iPod, tv, computer. This is why they have a ton of cyber cafes everywhere.

Also they might have a large population but a good portion of it is in the country where they live on farms and don't have a use for a high end product such as a TV or iPod because they don't have the infrastructure to support it.

You have a point there, but that last part, about cars. As a European I can say the same thing to any American... In the end, it depends on your own standard. And no way china will stop exporting. So many countries depend on them... Look at what they are doing with Africa, instead of just donating money, they create jobs... Generate income for the people there... and then sell them their services and goods. No if I would have to put my money on 1 country to come out as the next World-Dominator it will be China on the short run and India as a close second, maybe even the leader in about 40 years. I definitely would not put my money on the US or EU cause well... we both are practically bankrupt. lol.

That is absolutely true. But employment rates and living-standards in China already make Michigan look like a paradise. I just can't see them care when another couple million people live in horrific circumstances.

Who is declaring the metaphorical war against whom? Are you saying China declared war on the multi-national corporations by hacking them?

I think they're just recognizing that a communist government is a bad environment for a corporation, despite extremely low wages. China will enforce its laws only when they suit China. If you build something there, don't expect them to shut down factories producing knock-offs of your designs. And if the shit ever hits the fan, ALL your investments in China will become the sole property of China.

That was never an ideal business environment. China was an interesting experiment, but any big corp is wise to limit its ties to the ironically-named Peoples' Republic.

When since the death of Mao and the rise of the "Gang of Seven" has anyone thought China was Communist? That is like calling the old Soviet Empire a Communist state. They are a totalitarian dictatorship. Just 'cause they call themselves commies, that doesn't mean they are.
To quote I-don't-remember-who (maybe Hunter Thompson?) "Communism has not been tried and failed, Communism has not been tried."

Intellectually, in the ivory tower, and in the history books, sure I know that Soviet Russia wasn't ideally communistic. It didn't adhere to communist ideals. But I didn't think that anyone agreed what those ideals were. Given that Soviet Russia is the primary example of communism, and that everyone associates the two together, I'd argue that here in the real world, they have defined what communism is.

A much better example of communism would be the short-lived anarcho-communist Spain. Real communist states are often short-lived and collapse into oligarchies or dictatorships due to the instability of the country post-revolution. Spain was a working but short-lived example of the closest thing there has been to communism as advocated by Marx and others. George Orwell traveled to Spain and fought alongside the anarchists / communists there, against the fascists.

"Totalitarian dictatorship" doesn't really capture the aspects that have changed(and significantly). You can be a "totalitarian dictatorship" on top of virtually any economic system(other than the ones that are too unproductive to support any sort of central government with real power). You can run a practically free market with surprisingly little political freedom, and some totalitarian dictatorships have. To run a serious command economy, you practically have to be a totalitarian dictatorship, so most planned economies are.

China has been substantially authoritarian for pretty much its entire modern history. The interesting change is the shift from being an actually-substantially-communist economy to being a de-facto-capitalist economy, with substantial elements of state ownership and cronyism(the former in a variety of locations, especially those deemed strategic, the latter particularly notable at the local level). The multinational corporations who flock to China to build stuff on the cheap would Not be welcome in an actual communism, and are only getting cold feet now because they are learning the costs of dealing with cronyism and weak rule of law.

I can't speak for "everyone"; but I'm not using the term because "fascism" also has a number of salient and distinctive cultural features that distinguish it from other flavors of authoritarian or totalitarian and capitalist society.

Fascism, while annoyingly mutable and difficult to pin down, is more specific than Totalitarianism, which is itself more specific than Authoritarianism. The three are(roughly speaking) visualizable as a set of concentric circles, with fascism in the middle, totalitarianism around it, a little ways out, and authoritarianism outside that, again a way further out. Each time you go in one ring, you exclude certain forms of political organization. Just to make things hairier, neither Fascism, nor Totalitarianism, nor Authoritarianism have neat links to specific economic models. There are some implications and exclusions(for instance, you cannot run a command economy on a national scale without a political system that is Totalitarian in character, you cannot run a Totalitarian or Fascist political system without an economic system and technological base capable of sustaining centralization, and self-identified "fascists" will oppose self-identified "communists" and vice versa); but no neat one-to-one correspondences.

Consider, for example, a Fascist Totalitarian Capitalism vs. a non-Fascist Totalitarian capitalism: let's say Fascist Germany vs. one of the hard-right "banana republics" established by US interests in South America. In both cases, "communism" and "communists" will be explicitly rejected and violently suppressed. In both cases, a form of capitalism will be the economic mode, albeit(because of the totalitarianism being rather corrosive to rule of law) with certain amounts of cronyism creeping in. Look at the differences, though: In a fascist state, the espoused aim of the crony capitalism will be restoration of national greatness in the face of perceived degradation, humiliation, or decay(seen as brought on by some combination of liberalism and external forces plotting along with internal enemies). In the banana republic case, the aim of the crony capitalism will be the enrichment of a foreign corporation or corporations, who in turn kick back a slice of the money to the local strongmen who keep riots to a minimum and the proles in line.

In the Fascist arrangement, the cronyism is seen as a bargain, mediated by the totalitarian state, between the power of industry and the "People"(in an ethnic nationalist sense, not a communist "proletariat" sense). In order to restore the glory and (military) power of the nation, strategic industries will be favored, and any leftist labor movements that inconvenience them will be intimidated, beaten, or sent to the showers; but the bargain is seen as a populist one: the favored industries enjoy substantial perks; but are supposed to be bound to the national interest, not to profit maximization. Layoffs to please Wall Street would not fly in a Fascist state.

In the "banana republic" arrangement, the cronyism is an bargain, more or less explicit, between an external corporation and the local elites. The bargain is, the local elites keep order, protect the property of the crony entity by force, and crush any labor movements that are seen as threatening. In exchange, they get a cut of the profits(without having to possess any technical capacity themselves) and all the usual perks and pleasures of power. Not only is this arrangement not about "national glory", it is exactly the sort of humiliation that can make (depending on conditions) either fascist or communist economic populism compelling. If the local elites feel sufficiently mistreated by the outside entity, and have some sort of cultural mythology to draw on, you may see a fascist reaction. If the local elites are too weak or lack any useful cultural mythology, and the lumpen proles are too bitter about their obvious economic oppression, an attempt at commuunism may occur.

It simply isn't possible to be "Totalitarian" unless you can, in fact, centralize the levers of power in a political unit into the hands of a Supreme Leader(and, in practice, his cronies and right-hand men). Otherwise, you might have a sort of autocratic feudalism, where the King can do whatever he wants; but he has to ride right over to where he wants to do it, with his sword and his cousins, and wherever he isn't, some nobleman holds sway; but you won't have a "Totalitarianism". To do this requires substantial resources. Bureaucracy, guns, mass communications, transport assets, etc. If you don't have those, you can't have "Totalitarianism".

On the other hand(and this is where Papa and Baby Doc, and the poor bastards in Haiti come in); because of globalization and trade, you don't have to be able to generate those resources internally as long as you have some means of buying them. In the case of Haiti, a mixture of exploiting US/Soviet tensions for handouts, misappropriating aid money, and selling off timber concessions, provided those means. This is how, while Haiti itself didn't really have an economic system productive enough to support much of anything, there was a sufficiently productive economic system feeding the Duvaliers.

Nations with natural resources that are either trivial to extract, or easy enough to extract with foreign technical assistance, are commonly vulnerable to this pattern. Anybody who can gain power(usually a charismatic populist who wins the last real election, or an ambitious soldier with some guts and a lot of luck) can then bankroll a Totalitarian regime by strip mining, or selling the rights to strip mine, the place and buying the materiel he needs from outside, and the support he needs from inside.

Perversely, this often leaves such nations worse of, even compared to other repressive regimes. Trujillo, say, just next door in the Dominican Republic, was every bit the Totalitarian bastard that Duvalier was, if not worse; but the DR is way less fucked today than Haiti is, in no small part because Trujillo spent much of his reign building wealth(and then concentrating it in his own hands, of course). While Duvalier sold the place off to pay for his regime, Trujillo had soldiers gunning down the poor people who attempted to enter "his" forests to try to make a living. Serious dick move; but one of the reasons that the DR hasn't had all its topsoil wash into the sea.

This is sort of the mean, ugly, step-child of the idea that free trade and globalization will spread political freedom to go with the economic freedom:

Traditionally, a dictator's ability to run the place into the ground was limited. If you don't pay the soldiers, they'll have your head on a pike. If you can't afford to arm them, the starving mob will drive them off, and then have your head on a pike. If your infrastructure rots, you'll find yourself ruling an area of about a week's march from your palace, and nowhere else. To succeed as dictator, you pretty much had to keep at least the economy going(doesn't mean you can't torture lots of people, or disappear your opponents, or have your pick of children delivered to your palace pleasure-pits daily); but does require that society function to a degree, that there be some amount of rule of law(even if it only applies to petty criminals, not to grand ones like you), and so forth.

In a global economy, by contrast, these requirements only hold if your country has literally nothing worth mining, or selling off, or otherwise exploiting. If you do have something, you can always find somebody willing to hold their nose and do business with you. If your resource is merely valuable(diamonds or teak, or cocaine, say) you may have to deal with various more or less shady characters. Criminal syndicates, scruffy ex-easter-bloc arms dealers, that sort of thing. Not a crippling problem, "Pecunia non olet" and Kalashnikovs work just fine once you brush the dust off. But if your resources are strategic, boy, you are golden. Run a virulently repressive theocratic monarchy? If you will sell oil, the US will be your best buddy, sale of advanced weapons included, no problem.

You cannot create a totally free market under a Totalitarian Dictatorship, it is true; but that isn't really of much economic relevance. "True Free Markets" are about as common as "Real Implementations of Communism". They aren't creatures of the real world. However, there are some real-world structures that substantially approximate, and reap many of the benefits predicted for, "free markets". Unfortunately, it is possible to create those while also enjoying a substantial degree of political control. If you aren't a klutz about it, you can have your nigh-absolute power while leaving most markets mostly undistorted, most of the time, and thus enjoying most of the benefits.

Slightly less free market; but probably even more dangerous to freedom generally, is the fact that you can strategically distort the market such that obeying and supporting your power is a rational profit-seeking act for most market entrants. That is where the old command-and-control guys missed an opportunity and(unfortunately), the contemporary authoritarians don't seem to be making the same mistake.

Communism _is_ a totalitarian dictatorship, even if it tells you fairy tales about being "for the good of the workers".

If every single time communism was tried it instantly showed its true colours, doesn't this mean there's something wrong with its core idea? There were over fourty implementations of communism so far, so you can't call that a fluke.

When since the death of Mao and the rise of the "Gang of Seven" has anyone thought China was Communist?

Someone called present-day China something like "the world's first mature fascist state", by which I assume they meant something akin to Mussolini's original definition where the interests of the state and of business were closely associated and effectively one and the same thing.

It has also been said that China went straight from being a traditional society to being a corporatist one without going through the transitional democratic phase. At any rate, those in power in the West thought that encouraging

communism really has nothing to do with low wages or anything else you mention. in fact, communism is contrary to those things. china isn't anything close to communist, except in it's internally directed rhetoric.

To be more accurate, no corporation has ever tried to make anyone else rich. That the corporations boost the Chinese economy is a side effect they couldn't care less about; their aim is to produce something for the lowest cost possible and sell it for the highest price possible. China's ironically utterly capitalist approach to worker's rights and environmental protection means the cost is lowest there. That made it attractive to corporations.